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Vilsack Says He's Working to Increase Dairy Price Supports
Wisconsin Ag Connection - 07/30/2009

U.S. Senators Herb Kohl and Russ Feingold, along with a dozen other senators who represent farm states, were told by Agriculture Secretary Tom Vilsack on Wednesday that the USDA has agreed to raise the price support for dairy products as a first step to relieve hard-pressed dairy farmers across the nation. During a meeting to discuss how to address the plummeting milk prices, Vilsack said he's working with the Office of Management and Budget to temporarily increase the dairy price support program in order to help restore farm level prices, as well as producers' ability to produce basic cash flow for their operations.

Secretary Vilsack said USDA was negotiating a final support price increase with the OMB and hopes to have a decision prior to the August recess. In an effort to expedite the process, the group of senators sent a letter to OMB Director Peter Orszag urging that he act promptly to approve of the USDA's planned price support increase.

"All year long, dairy farmers from Wisconsin have had to watch milk prices drastically decline, while farming costs remain high," Feingold commented during the meeting. "This situation has farmers in Wisconsin and across the country facing significant losses. Even with the improved Milk Income Loss Contract program and actions taken this spring by the USDA, the continuing crisis calls for emergency action."

Feingold also said Vilsack told him that USDA would be willing to collaborate with the Antitrust Division at the Department of Justice to improve competition in agriculture.

"Earlier this year, I asked the Justice Department to examine whether the increased concentration at the cooperative, processor and retail levels is leading to increased margins in the middle and harming both dairy farmers and consumers. As farm level prices have fallen, retail level prices for dairy products have often not followed suit and profits have even soared for some dairy processors," the Middleton Democrat said.

Meanwhile, Senator Kohl said he feels there's no doubt that Secretary Vilsack understands the desperate circumstances many dairy producers find themselves in.

"Milk prices have plummeted and the costs of producing milk have outpaced the price they get for it. Our farmers quickly find themselves losing substantial money," Kohl said. "We emphasized that we'd like to see the federal government more aggressively use the tools at their disposal to help the industry through an extraordinarily rough market."

From January though April of this year, the U.S. all-milk price has averaged $4.80 per hundredweight below the U.S. average cash cost of production.

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